Tata Power could turn out to be multibagger: Angel Broking

MUMBAI: Rajen Shah, Chief Investment Officer, Angel Broking, is bullish on Tata Power as the company aims to increase its generation capacity. He has set one-year target of Rs 140 but feels that in long run, the stock can turn out to be a multibagger.

Following are view on the stock in an interview to ET Now.

A few days back we recommended Tata Power very strongly at about Rs 103-104 levels in one of the seminars. Tata Power has got a total installed generation capacity of about 6,800 megawatt. Its market-cap is about Rs 25,000 crore and the management is aiming to take this generation capacity to about 25,000 megawatt by 2016-2017.

That is a huge jump actually in the generation capacity and if that happens, we are looking at huge growth of almost 250 per cent growth in the generation capacity of Tata Power.

We also need to keep in mind that while there are concerns of coal availability for power plants, Tata Power has been aggressive in acquiring lot of coal assets in Indonesia. Recently, it acquired some 26 per cent stake in one of the Indonesian company which owns lot of coal resources and prior to that also it acquired one company in Indonesia or has entered into a long term agreement for its coal requirement.

So Tata Power is one stock which we are extremely bullish and its one year target is Rs 140. But in the next two-three years, it could turn out to be a multibagger.

At 02:00 p.m.; the stock was at Rs 108.10, down 3.27 per cent, on the BSE. It touched a high of Rs 113.20 and a low of Rs 107.80 in trade today.

Tata Power has a market cap of Rs 26,519 crore, available at EPS (TTM) of Rs 4.99 and a P/E multiple of 21.81 times. The book-value per share is Rs 49.54 and price to book ratio is 2.26 times.